Franck Paboeuf successfully presents his PhD thesis
On September 1st, 2017, Franck Paboeuf presented his doctoral dissertation to a jury of scientific specialist. The analysis he has done over the last years deals with the prediction of success or failure of new product introductions in the feed additive industry.
Franck passed this examination with verve, and is from now on a doctor in economical sciences. We congratulate him for the hard work and the sacrifices done, which have led to the successful presentation of his doctorate. A summary of his study is given hereunder.
Launch of new products in animal nutrition in Europe: How to reduce the risk of commercial failure ?
Industrial companies get about25 to 30% of their income from the sale and introduction of new products (Wind, Mahajan, Bayless, 1990 ; Edgett, 2011). In the animal nutrition sector, over 50% of the new product introductions fail, and there are no , bibliographic references able to explain this mismatch.
That’s why an empirical study is conducted in Europe in collaboration with 51 market managers and 21 companies involved in animal nutrition. Information regarding the development and introduction process of 125 new products, of which 40 considered to be a failure, and 47 recognized as a success, was collected in order to build a data-base.
Applying a “Principal Component analysis”, thirteen factors are detected defining and explaining the obtained commercial result. These “risk factors” are linked to skills and knowledge existing within the company, to the marketing-mix but also to the attention paid by the management team to new product development.
After that, a “Discriminant Analysis” is performed on basis of five relevant indicators: the innovation degree and the adaptation capacity of the new product to the local market, the involvement level of the management team in the product development project, the knowledge of competitors, the financial benefit a user gets in case of practical utilization.
This model allow to predict the commercial outcome (failure or success) with an error rate of only 15%.
As a conclusion an econometric model on basis of these same 5 indicators was developed. Thanks to this methodology, it is now possible to predict, even for a new product before its launch, a probability of commercial success. The use of this econometric model and the control of the thirteen main explanatory factors of the commercial result constitute an interesting tool for decision-making regarding the launch of new products.
However, a preventive approach is to be preferred. The thirteen main factors responsible for the commercial performance have to be indeed taken into consideration as soon the specifications of the new product are precisely defined. This operational procedure allows to reduce significantly the financial risk associated to the development and the launch of a new product.
Franck Paboeuf, Dr. In Economic Sciences and Management